Starting in the US, the trend to bag the best bargain before Christmas came in the form of Black Friday. Following the success retailers were experiencing in the US (and of course many UK retailers now operating or in partnership with US companies) it only seemed right that the UK followed suit.
Following the trend
Originally designed to be a one-day event, Black Friday is said to offer consumers the best bargains both online and in store. As more and more retailers joined in the discount day, consumers began to almost hold retailers’ hostage to this date every year – bigger and bolder discounts are now expected to take place on this day.
Of course, following the success of Black Friday and the increase in online shopping sales, we now see “Cyber Monday” and the whole discounting event now being marketed as a week-long sales promotion.
However, for many retailers they can also face the wrath of the consumer if discounts are not deemed to be reasonably discounted enough for this day. But are retailers able to fully sustain this discounting model and also be able to fulfill and satisfy the demand from consumers?
According to LCP Consulting, the answer to this would be a simple "no." Well, at least to 61% of UK retailers. These retailers recently responded to a survey which they stated they saw Black Friday as an “unprofitable and unsustainable promotion”.
But, with consumers now having this date in mind and the expectations being set can retailers take the chance of not taking part?
Not for everyone
Not all retailers chose to take part in the Black Friday bonanza with retailers such as Asda, Next, and Ikea avoiding the marketing craze, mainly to avoid the mayhem that it can cause and the negative stigma that can sometimes be associated with the day.
Retailers such as Asda have opted out for a couple of years now due to the fighting and battling between consumers over heavily discounted electrical goods. They now settle for their continued discounts and promotions to help them boost their pre-Christmas sales.
Everyone loves a bargain and people will shop around for the best deal.
However, what some retailers have realized is that they don’t actually miss out. Just because you can offer the best deal does not mean you can make anything from it. In other words, it’s not sustainable and keeping your prices discounted but also realistic is much more credible and also reliable.
A Brexit black hole
With a surge in orders and an increase in site traffic consumers in the UK are taking the opportunity to not only bag themselves and their loved ones a discount for Christmas, but also take the opportunity to shop for their favorite items now, ahead of much talked about price increases in 2017, in light of Brexit talks.
It would be naïve to think that all of the marketing campaigns and sales were the sole reason for the hike in sales this year.
Retailers are already voicing their concerns over pricing in relation to Brexit and the potential price increases consumers could be looking at. Matched with an already weak pound against the dollar and Euro have consumers taking this opportunity to make the most of what retail and online have to offer. Taking the bull by the horns so to speak.
It also makes the economist's job much more interesting when looking at predictions for 2017 Black Friday. Has the increase in online and in-store sales for 2016 been seen as a fluke and will we see a sharp decline in 2017? Only time will tell (12 months to be exact) but for 2016 the Black Friday events have certainly supported retailers balance sheets.
The ones who have succeeded the most are those who have not only retained existing customers but attracted new. They have been innovative in their sales and marketing approach and opened up opportunities for additional revenue streams rather than placing a “Black Friday sale” sticker in their shop window.
